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Vancouver, British Columbia – March 12, 2019 – Next Green Wave Holdings Inc. (CSE: NGW) (OTCQB: NXGWF) (“Next Green Wave” or the “Company”), is pleased to announce that it, together with its US subsidiary Crossgate Capital US Holdings Corp. have signed a definitive agreement (the “Agreement”) dated March 11, 2019 to acquire 100% of California-based SDC Ventures, LLC (“SDC”) (the “Transaction”). SDC is a premium cannabis consumer products goods, manufacturing and extraction leader, having 8 leading cannabis brands with 45 CBD and THC products that have a combined global social influencer reach of over 25 million people and with 100+ million YouTube views.
SDC (WEARESDC) is a team of brand building, cannabis consumer product goods, manufacturing and extraction professionals, that have decades of experience in cannabis in California. SDC has a growing network of retail and online sales channels including 700 Zumiez stores which compliments Next Green Wave’s current distribution opportunities.
“The SDC team shares our vision and provides expertise that is synergistic to that of Next Green Wave – to be the number 1 cannabis consumer products goods company in California,” stated Leigh Hughes, CEO of Next Green Wave. “Not only does this acquisition give us an array of premium brands associated with key world-renowned influencers to penetrate global markets, it also gives us increased distribution with revenues from sales, along with direct to consumer reach, relationships and specialty extraction methods. Having the opportunity to market through strategic brand partners to millions of validated and loyal followers is a big deal when marketing consumer products.”
BRANDS PARTNER LICENSES & PRODUCTS ACQUIRED
SDC’s selection of exclusive licensing relationships are defined by their connection to a core loyal global audience, their reach across digital/social platforms and their ability to partner on product development and marketing. With the Brand Partners below, over 45 CBD and THC products have been acquired that cater to the entire cannabis user market, including pets, in California and other parts of the world;
“We are excited to join forces with Next Green Wave, which is arguably one of the leading cannabis innovators in California,” said Ryan Lange, SDC co-founder. “This transaction will allow the SDC team to capitalize on its decades of cannabis expertise in California and to rapidly expand our brands, distribution channels and manufacturing expertise across the state and into international markets. Next Green Wave brings world-class leadership and coupled with our common values as innovators, we believe by joining forces we can accelerate our proposition to become a serious cannabis consumer product goods company.”
ACCELERATING MANUFACTURING THROUGH ACQUISITION
SDC brings years of experience in cannabis manufacturing and extraction processes that give an edge and creative ability to experiment with new methods in production of finished products. As part of this transaction, the SDC team will immediately become the Head of our Extraction and Manufacturing unit within our 3,240 sq. ft facility. Speciality extraction and manufacturing methods include ice water hash – the washing of the cannabis plant from whole plant fresh frozen material, rosin pressed from ice water hash and cannabis only terpenes that have a special process to end with a final result that has never been winterized. These artisanal methods will have an immediate impact on new products that Next Green Wave will now bring to market within the next three months.
As part of this transaction, SDC brings over 30 different types of extraction-based products across its 8 brand partners including everything from vape cartridges, rosins, ice water hash, tinctures, dog products, consumables as well as a number of CBD wellness and recovery products.
The purchase will be completed through the Company’s wholly-owned subsidiary Crossgate Capital US Holdings Corp. The total value of this transaction is $20.6 million in cash, shares and performance shares to be earned over the next three years and will be payable as follows (all cash amounts in US currency):
In addition, to the above, if certain performance metrics are met, additional consideration will be paid as follows:
Each of the above performance metrics allow for a pro-rata amount to be paid for partial completion of the metric. In the case of the performance metrics relating to net sales, in order for the 10,000,000 shares to be issued under (d) and (e) above SDC will be required to achieve $50,000,000 in net sales.
Each of the SDC Securityholders have entered into an Escrow Agreement such that the Next Green Wave Shares issued will continue to be held in voluntary escrow and released over a 36-month period and pursuant to the terms of those escrow agreements. This transaction is an arm’s length transaction.
The Company has agreed to pay finders’ fees to certain finders equal to approximately 3.6% of the value of the transaction to be paid according to the schedule of closings set out above.
The above transaction and finders’ fees are subject to the acceptance of the Canadian Securities Exchange.
APPOINTMENT OF HYBRID FINANCIAL FOR INVESTOR RELATIONS SERVICES
The Company has also appointed Hybrid Financial Services of Toronto, Ontario as investor relations consultants, to provide comprehensive investor relations services coverage across both Canada and U.S market. The Company will issue $150,000 worth of shares at a price of $0.67 CAD as compensation for a six-month marketing agreement. The shares are subject to a four-month hold period.
ABOUT NEXT GREEN WAVE
Next Green Wave (NGW) is a vertically integrated seed-to-consumer premium medicinal and recreational cannabis company operating in California – the world’s largest cannabis market. NGW has acquired licenses for its nursery/breeding, cultivation, extraction, and distribution operations covering both medical and recreational cannabis production and services. Construction of phase one of the indoor facility (35,000 ft²) has been completed and is now moving into production of premium cannabis products. NGW will push the innovation envelope and will develop premium brands that can be distributed across the globe. NGW has a library of more than 120 genetic cannabis strains which include several cannabis cup award winning genetics. The company has acquired over 15 acres of cannabis-zoned development land in Coalinga, California, providing future growth. To find out more visit us at www.nextgreenwave.com or follow us on Twitter at @nextgreenwave, on Instagram, and LinkedIn.
ABOUT SD CANNABIS
SD Cannabis (SDC) specializes in developing extraction and manufacturing methods that focus on maintaining the quality and natural benefits of cannabis. Through its use of the most sophisticated equipment available, the team takes a scientific approach to capturing all of the active available cannabinoids in the plant and then integrates those ingredients into products without adding other artificial or dangerous fillers. In addition, SDC’s leadership team brings decades of experience in developing, launching and marketing brands across the landscape of culture, art, music, action sports, and fashion with a core understanding of how to leverage the power of today’s influencers to drive consumer demand and product innovation. To find out more, visit us at www.wearesdc.com and on Instagram.
On behalf of the Board,
CEO and Executive Chairman, Next Green Wave Holdings Inc.
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For more information regarding Next Green Wave, contact:
VP Corp. Development
Tel: +1 (778) 589-2848
Next Green Wave Forward Looking Statements
This press release contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, are “forward-looking statements.” Forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward looking statements. Such risks and uncertainties include, among others, the risk factors included in the preliminary prospectus, including without limitation dependence on obtaining and maintaining regulatory approvals, including acquiring and renewing state, local or other licenses and any inability to obtain all necessary governmental approvals licenses and permits to complete construction of its proposed facilities in a timely manner; engaging in activities which currently are illegal under US federal law and the uncertainty of existing protection from U.S. federal or other prosecution; regulatory or political change such as changes in applicable laws and regulations, including U.S. state-law legalization, particularly in California, due to inconsistent public opinion, perception of the medical-use and adult-use marijuana industry, bureaucratic delays or inefficiencies or any other reasons; any other factors or developments which may hinder market growth; NGW’s limited operating history and lack of historical profits; reliance on management; NGW’s requirements for additional financing, and the effect of capital market conditions and other factors on capital availability; competition, including from more established or better financed competitors; and the need to secure and maintain corporate alliances and partnerships, including with customers and suppliers. Readers are encouraged to the review the section titled “Risk Factors” in NGW’s preliminary prospectus. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although NGW has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. NGW no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, new information or for any other reason except as required by law.